California Tribes Get Their Way Against Kalshi in Prediction Market Case

A federal appeals court has handed two California tribes a key win in their fight over prediction-market “event contracts” being offered statewide, including on sovereign tribal lands. For players, the immediate change is limited: the ruling did not order Kalshi to stop offering the contracts in California, but it strengthens the argument that some of these products can be treated like gambling on tribal land rather than as a federally regulated financial product.

In a 3-0 decision, the US Court of Appeals for the Ninth Circuit sided with the Blue Lake Rancheria Indians and the Chicken Ranch Rancheria of the Me-Wuk Indians in their case against Kalshi and Robinhood. The tribes argue they must retain full sovereignty rights to regulate gambling on tribal land, and that those rights were breached by the availability of Kalshi’s event contracts across the state.

The decision is notable because it cuts against a prior federal district court view. The lower court had refused to grant a preliminary injunction, reasoning that the Unlawful Internet Gambling Enforcement Act and the Commodity Exchange Act governed Kalshi’s event contracts, not the Indian Gaming Regulatory Act (IGRA). It also accepted Kalshi’s position that it is a federally regulated entity offering derivatives under the CEA, and it rejected the tribes’ Lanham Act claim.

The Ninth Circuit panel said the tribes’ IGRA theory is viable and sent the matter back to the lower court to reconsider the remaining arguments. The panel held the tribes were likely to succeed on claims that Kalshi’s sports-event contracts on tribal lands violated IGRA and the tribes’ gaming ordinances, and said the lower court “erred” by treating the sports-event contracts as a federally regulated derivative rather than “an act of placing a bet or wager.”

There are still more court steps ahead. Because the appeals court did not order Kalshi to stop offering contracts in California, further legal action may follow if the tribes or state regulators want that result. Gaming attorney Daniel Wallach called the decision a blueprint for how similar challenges may play out when tribes are involved, including the possibility that platforms could be pushed to avoid accepting trades from sovereign tribal land.